Realtor Yvan Rhéaume says Ottawa is still a hot real estate market, but buyers have a better chance of competing for homes now compared with last winter.
The Metro Vancouver residential real estate market has had a fairly strong start to the year, relative to the poor performance of one year previously, the Real Estate Board of Greater Vancouver reported February 4.
There were 1,571 home sales on the MLS in January, which is a 42.4 per cent increase over January 2019.
Traditionally the slowest month of the year for real estate sale registrations (see graph below), because there is so little home-hunting activity in December, January’s sales were a 22.1 per cent decrease from the 2,016 homes sold in December 2019.
Last month’s sales were still slightly unde long-term typical activity for the month, as the very active markets of 2015 through 2017 pushed up the 10-year sales averages. January’s total was 7.3 per cent below the 10-year January sales average.
“We’ve begun 2020 with steady home buyer demand that tracks close to the region’s long-term average,” Ashley Smith, REBGV president said. “Looking at supply, we’re seeing fewer homes listed for sale than is typical for this time of year. As we approach the traditionally more active spring market, we’ll keep a close eye on supply to see if the number of homes being listed is keeping pace with demand.”
There were 3,872 homes newly listed for sale in January, which is 20.1 per cent lower than the 4,848 homes listed in January 2019, although it’s more than double the number of homes that were listed in December 2019.
This takes the total number of homes listed for sale in Metro Vancouver, as of January 31, to 8,617, which is a 20.3 per cent decrease from January 2019 and only a 0.2 per cent higher than December 2019. The current figure is also 13.7 per cent below the 10-year January average number of active listings.
The increase in demand coupled with a relatively low supply of homes for sale is inevitably keeping home prices on the slow upward trajectory they have been seeing since summer 2019 (see graph below).
The composite benchmark price for all home types in Metro Vancouver is currently $1,008,700. This is a 1.4 per cent rise in the past six months, and 0.8 per cent higher than December, although still 1.2 per cent less than in January 2019.
Sales and prices by property type and area
At 439 transactions in January, Metro Vancouver’s single-family detached home sales were up 29.5 per cent year over year. However, it’s also a 26.7 per cent decline over December’s relatively strong sales, which is bringing the sector back towards buyer’s market territory.
Nevertheless, the typical price of a detached home in the region rose 0.5 per cent month over month to $1,431,200, which is a one-per-cent recovery over the past six months, but 1.7 per cent lower than January 2019.
Region-wide figures only tell half the story, however. Seven of the board’s 20 areas saw detached prices in January higher those of one year previously, led by Whistler (up 4.8 per cent) and Squamish (up 4.7 per cent). Annual declines in region’s overall detached benchmark price were led by the Sunshine Coast, (down 5.9 per cent) and Bowen Island (down 5.3 per cent). The double-digit benchmark price declines seen in areas such as West Vancouver and Vancouver West have now subdued to two to three per cent annual price drops.
In the attached-home sector, such as townhomes and duplexes, sales across Metro Vancouver rose 55.1 per cent year over year to 318 transactions. This is 12.6 per cent below December 2019’s attached home sales.
Townhomes have seen the biggest benchmark price recovery since last summer, with the typical price of an attached unit now at $782,500. This is a 1.6 per cent increase over the past six months, a 0.5 per cent increase from December 2019 and only 0.7 per cent lower than in January 2019.
Four MLS areas saw higher attached-home benchmark prices than one year previously. Like in the detached sector, Whistler and Squamish saw townhome prices increase the most, up 9.4 and 7.7 per cent respectively. Ladner (down 6.7 per cent) and Tsawwassen (down 6.5 per cent) continued to lead the annual price declines for this sector, with new townhome construction in those areas apparently exceeding local demand.
Some 814 condos traded in Metro Vancouver last month, which was a 45.6 jump year over year, and a 22.7 per cent drop compared with December.
The benchmark price of a condo in the region has risen one per cent over a month to $663,200, which is a 1.5 per cent increase over the past six months, but a drop of one per cent over the year since January 2019.
Looking at condo markets in the different areas, five MLS areas saw values hold their own from one year previously, with prices up 1.8 per cent in Port Moody and 1.2 per cent in Coquitlam. Like townhomes, the biggest annual price declines in the condo sub-markets were seen in Ladner (down 7.1 per cent) and Tsawwassen (down 8.1 per cent).
Erin Nicole Davis
In a newfound world that embraces the remote work revolution, Canadians are increasingly directing their real estate dollars outside of Canada and into second homes in dreamy — and often much warmer — spots.
This comes at a time when the cost of recreational properties in provinces like the already notoriously pricey British Columbia and Ontario soared to sky-high levels not long after the onset of the pandemic.
One scroll of social media last winter would reveal that a good handful of Instagram “friends” relocated — at least temporarily so — to warmer pastures in places like Nosara, Costa Rica and Miami. Many relied on sublet accommodations, but some actually bit the bullet and purchased second homes.
To discover this year’s preferences in out-of-country home-buying, Point2 analysts examined the search volumes for more than 2,000 real estate-related keywords in islands, countries, and cities outside Canada to find the 30 most popular locations for second homes in the Americas in 2022.
Mexico maintained its #1 position as the most popular home buying location, recording a 28% increase in searches, with dreamy locations like Puerto Vallarta, Tulum, and Playa del Carmen being the most searched destinations.
South of the border, the United States retained its #2 position on the podium, with Maui, New York, and Miami in the top preferences for Canadian homebuyers.
Costa Rica takes the #3 spot for the fourth year, with a 23% increase in monthly searches, of which Tamarindo, Jaco, and Nosara took the largest share.
Meanwhile, Canadians’ interest grew the most over the previous 12 months in El Salvador and Grenada, with real estate-related searches for these locations increasing by 87% and 66%, respectively. With a 34% jump, the Dominican Republic saw the most significant increase in the number of monthly searches of all of the countries in the top 10 most desirable home-buying locations.
“We have experienced exponential growth, and this is due to several factors. First of all, it’s worth highlighting the knowledge of more than 14 years in the real estate area that added to the tools we use and the incorporation of more than 16 agents nationwide, along with all the advertising established in the different social networks,” says Felix Del Valle, of Bienes Raices Dominicana Real Estate.
“This added to the issue that we all know about the pandemic and the desire of people to go out and invest in other destinations. At that point we understood that the attraction to our country is due to the excellent investment climate offered by the economic stability and great opening offered by the central government, the Dominican Republic being one of the first countries in the region to open its doors to tourism and foreign investment for economic reactivation. All these factors have generated this real estate movement in our country,” he continues.
It should be noted that the two countries that saw the most significant increases in interest and the number of monthly searches didn’t make the top 30: Real estate-related searches in Guyana and Dominica went up 254% and 112%, respectively, but that wasn’t enough to earn the two locations spots on the list.
In the last year, searches increased for 17 countries on this list and fell for the other 13 (although they still made the list due to their significant search volumes). Notably, the largest drop in the number of real estate-related keywords was for the US Virgin Islands (-30%), followed by Turks and Caicos Islands (-29%) and Ecuador (-29%).
Not surprisingly, the common denominators are that most of the top spots are in a warm climate (and — judging from last year’s brutal winter — why the heck not?) and feature relatively affordable real estate compared to parts of Canada.
Erin Nicole Davis is a born and raised Toronto writer with a passion for the city and its urban affairs and culture.
A housing correction which has already led to four consecutive months of price declines in the previously overheated Greater Toronto Area market could end up becoming “one of the deepest of the past half a century,” a new report from RBC warns.
New data released by the Toronto Regional Real Estate Board (TRREB) last week revealed that the average benchmark price for a home in the GTA fell six per cent month-over-month in July to $1,074,754.
Sales were also down a staggering 47 per cent from July, 2021.
In a report published on Aug. 4, RBC Senior Economist Robert Hogue said recent data from real estate boards underlines that higher interest rates are beginning to take a “huge toll” on the market.
Hogue said that with further hikes to come, prices will likely continue to slide in the coming months.
That prediction, it should be noted, goes against a report from Royal LePage last month which painted a rosier forecast for sellers in which values would more or less holding for the rest of the year following some declines in the second quarter.
“Our expectations for further hikes by the Bank of Canada—another 75 basis points to go in the overnight rate by the fall— will keep chilling the market in the months ahead,” Hogue said. “We expect the downturn to intensify and spread further as buyers take a wait-and-see approach while ascertaining the impact of higher lending rates. Canada’s least affordable markets Vancouver and Toronto, and their surrounding regions, are most at risk in light of their excessively stretched affordability and outsized price gains during the pandemic.”
The Bank of Canada has hiked the overnight lending rate by 225 basis points since March and has warned that further hikes will be necessary given that inflation remains at a near 40-year high.
In his report, Hogue pointed out that the housing correction “now runs far and wide across Canada” but he said that it is particularly pronounced in the costlier markets of Toronto and Vancouver.
In fact, Hogue said that housing resale activity in Toronto is at its slowest pace in 13 years, outside of the early days of the COVID-19 pandemic.
The stockpile of available homes is also up 58 per cent from a year ago, he noted.
“With more options to choose from and higher interest rates shrinking their purchasing budgets, buyers are able to extract meaningful price concessions from sellers,” he said, pointing out that the average price of a home in the GTA is down 13 per cent from March. “We expect buyers to remain on the defensive in the months ahead as they deal with rising interest rates and poor affordability.”
While Hogue did say that condos in the City of Toronto are likely to remain “relatively more resilient” he said that prices elsewhere will continue to fall for the time being, especially in the 905 belt “where property values soared during the pandemic.”
The July data from TRREB suggested that the average price of a home in the GTA was still up one per cent from July, 2021.
Realtor Yvan Rhéaume says Ottawa is still a hot real estate market, but buyers have a better chance of competing for homes now compared with last winter.
“The craziness is over,” Rhéaume said on Sunday, but that doesn’t mean it’s less expensive to buy a home in the nation’s capital.
“What you see on the news is the prices are dropping and sellers are panicking. That may be the thing in other places across the country, but in Ottawa, we still see a price increase between 2021 and 2022,” Rhéaume said.
Thursday, the Ottawa Real Estate Board released its analysis of July listings and sales and declared a “profound slowdown” in the local home resale market.
“July’s numbers reveal that buyers are indeed putting on the brakes more heavily than what is typically expected during the mid-summer sales dip,” board president Penny Torontow said in releasing the latest statistics.
According to the board, its member realtors sold 1,100 residential properties in July 2022, compared with 1,718 in July 2021. The stats come from listings on the Multiple Listing Service (MLS).
The July 2022 sales were well below July’s five-year monthly average of 1,691.
Prices are still increasing, but just not at the same steep trajectory seen earlier in the pandemic.
According to the board’s figures, the average sale price for a residential property was $716,354 in July, an increase of five per cent from a year ago. For condos, the average sale price went up one per cent to $425,694 in July 2022, compared to the same month in 2021.
When it comes to year-to-date average sale prices as of July, the board has the first seven months of 2022 at $805,238 for residential properties, which is an 11-per-cent increase over the same period in 2021, while condos were at $461,557, a nine-per-cent increase.
Rhéaume said the return of one not-long-ago standard shows a change in the market: conditions are once again being put on offers.
He had one buyer recently purchase a townhouse with conditions on financing and a home inspection. “That was the first time in probably three years, at least,” Rhéaume said of the conditions. On top of that, he was able to negotiate the price.
Wendy Bell, the broker of record in an office of 250 agents, said news about higher interest rates and inflation had an impact on the market starting in the spring.
“That kind of put the brakes on things,” Bell said, opining that another interest rate increase would be “devastating.”
Bell said she finds herself trying to educate buyers and sellers about what’s happening in the local market.
Sellers have watched properties go for sums well beyond asking prices during the pandemic, while buyers recently have been reading about the market quickly returning to normal conditions. Both scenarios aren’t necessarily playing out in Ottawa.
Bell said homes didn’t have to be staged at the height of the buying frenzy over the pandemic, but now she’s urging sellers to make sure their homes are in order — like painting and removing clutter — to attract prospective buyers.
Bell said the months ahead will provide better indicators for the local real estate market as people come back from their summer vacations.
“Things will come back to normal in a more balanced market in the fall,” Bell predicted.
Broker Dawna Erskine said some sellers have been confused about why their homes aren’t attracting the same large offers that some neighbours received just months ago.
“That’s how drastic things have changed,” Erskine said, and she believes “we are going back to the pre-COVID days” when it comes to home prices.
Erskine said the pandemic has been a “nightmare” while trying to evaluate true values of properties for her eager buyer clients and trying to bid on homes against others willing to pay sky-high prices.
“I can’t tell you how often I’ve worked to guide buyers (and advised) not to buy this,” Erskine said.
“Is the winner really the winner? Or are you the loser?”
Erskine’s optimistic stability will return to the real estate market in the coming months.
“It’s going to become more balanced and I’m really looking forward to it.”
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